Hard Fork 19: The Future Price of Steem
Just as everyone else, I'm quite happy to be making more on my posts. There's a big problem that needs to be addressed though.
Starting a couple of steps back, it's important to note Steem's history - it's printed without a limit (unlike Bitcoin), which means that inflation is already built in. In other words, as open market rules go, the more there is of a product, the lower the demand and hence its price. And we've already seen Steem drop significantly, for extended periods of time, despite all efforts of the developers.
On top of that, Steem's value has a tendency to be low, because no other product or service uses this currency - it's just Steemit (and its various frontends, like ChainBB). Even the next iteration of Steem, EOS, doesn't use its older brother for the distribution of the tokens, but instead will use Etherium (which dropped in price, as I predicted recently).
Something else I predicted is that that Steem will start dropping in value as well - and that was before the effects of the hard fork kick in. How did I predict that? Just like all other cryptocurrencies out there, Steem peaked in value a month ago, because of WannaCrypt ransomware and its related laundering of (illegally) accumulated BTC. Now that WannaCrypt infected computers begin to decrease in numbers, so does any related laundering, which in turn reduces the value of cryptocurrencies, which are being exchanged back for fiat currencies.
On top of the abovementioned, now that the hard fork is in place, and thousands of Steemit users will receive hundreds of dollars for their last week's posts, which they will undoubtedly exchange for fiat money, we will see Steem drop in value significantly. My expectation is that Steem will drop at least 20,000 Satoshis or in other words, it will lose roughly 25% of its current value.
You can click for a bigger image!
There are four things to counteract this process:
- Stop printing Steem (which can't happen, because free Steem is required for Steemit to work)
- Start using Steem in other products and services (that's up to the developers and we haven't seen any successful efforts on that front; it's actually a design limitation)
- The Steemit users themselves - now that the hard fork is in place, they've been given a lot of power. If you see an already high paying post, vote with a lower percentage. If you see high quality content, which wasn't appreciated, vote with a higher percentage of your voting power. This will redistribute the wealth among more users, which will reduce the rate at which Steem is being sold and hence reduce the speed (but not the downwards direction) at which Steem loses value. And if we are lucky, this may be long enough for:
- Another money laundering (which we have no control over, but will increase the price of Steem for a period of time)
If you have any questions or suggestions, please leave a comment - I enjoy a good discussion! Also, don't be shy to upvote or resteem, if you found this information useful - my posts rarely receive lots of cash, and I certainly need some to support my expensive photography hobby! Thank you!
Check out some of my previous posts:
- DEK Photography: Grafitti on the Sea Port
- DEK Photography: The Sixth Fleet Flagship USS Mount Whitney (LCC-20)
- DEK Photography: Prisoner Snowflake
- DEK Photography: Catfection
- S7 Panorama Photography: Why the Black Sea is Named So
- DEK Photography: The Idle Seller
- DEK Photography: Who's There?
- DEK Photography: The Pride
- DEK Product Photography: Pork Fillet and Olive Paste Toast
- DEK Photography: The Sleeping Beauty
- DEK Macro Photography: Web of Magnetism
Followed! Definitely interesting Intake, deserve a greater upvote
I appreciate it, followed you back - you seem to be posting some quite interesting articles. Quite interested in Etherium, at the moment :)
Is the effect of hf 19 really that more money will be sold? The amount given stays the same it is sonly distrusted among more authors.
So why would this increase sell pressure?
You are right.
The reward pool is the same as before.
I expect the Steem to actually end up in stronger hands, because a lot of trending authors used to cash out.
Yea that's exactly what I thought. It also creates value when more people have the rewards.
It's because the hard fork took effect for all posts, which haven't yet been paid out (i.e. not older than seven days), effectively making everyone richer and more inclined to cash out.
Yes, you are right that the amount remains the same and my suggestion was to spread it out between all authors, by investing more voting power in lower paying articles we like and less voting power in articles, which are already paid well (say, in the hundreds of dollars).
Why? Well, the less cash each user gets, the more he we will wait before exchanging for BTC and then for fiat money. This will increase the time we have until the next money laundering (which will increase the price of Steem again). If there's no next money laundering, Steem will gracefully decrease in value (as opposed to high price drops, if well paid users cash out all at once).
That's the theory, at least :)
I'm definitely following you. It's nearly impossible to predict though, even with the built-in inflation (kinda like Dogecoin). WE have no idea the new innovation the future will likely bring.
I do think that in short term, Steem will lose value as I predict. I've no idea in the long run, as I wasn't emailed the upcoming schedule of all hackers, corrupt governments and evil corporations, who use cryptos to launder their illegally obtained money :)
Followed you back, I see we're interested in cryptos and it would be interesting to read your posts!
Interesting perspective. I hope you are wrong. I'd like to see Steemit prosper.
Maybe, I the long term, it will. But short term, I think it will go down. Regardless, it'll be interesting to see what happens with Steemit in the long run.
We're still in Steemit's infancy. There will be further social media sites like it in the future as well. Until then I hope you're right - cheap STEEM!
I should add I disagree the hackers caused any change in the market. The amount of crypto required to affect the market is tremendous.
Consider half a million computers infected by WannaCrypt, demanding Bitcoin for ransom. Then overlay a graphic of the boom of WannaCrypt with any crypto you want. Write back!
https://en.m.wikipedia.org/wiki/WannaCry_ransomware_attack
200,000+ victims asked for $3-600. Even if we assume 300,000 victims @ $600 each that is only $180M in a currency that trades a billion a day. I didn't check but I believe you are also assuming the hackers flooded the market with all that BTC at the same time. This makes no sense at all. The hackers are not trading for fiat on an exchange to get caught. They are more likely to either hold the BTC or try trading it privately for a privacy coin like XMR. If you really care to, you can check the ledger as their addresses are obviously known. Furthermore, the fact that people paying the hackers in BTC means they would have to buy that BTC in the first place, driving the price up.
Finally, you are ignoring the fact that BTC hit an ATH causing a dip as always. IMO these are the market makers and hedge funds trying to dip the market to cause panic selling so they can buy even more coins for cheap to further control the market. This theory is accepted in many crypto circles to explain this cycle. The WannaCrypt hypothesis is moreso seen as mainstream hyperbole directed against the crypto market.
Let's get some things straight:
The reported and infected machines (unique IPs) were over 500,000, out of which 250,000 were active, when I wrote my ETH/BTC article. At the moment, there are 400,000 infected machines, of which 220,000 are online. This means that a number of people (several hundred thousands) have paid or have performed clean reinstalls of their operating systems, hence the decline.
While several hundred million in BTC will produce a noticeable impact on the BTC market (although you claim it would not), it would actually have a HUGE impact on small cryptos, which are not traded in such high volumes. Exactly as you say, hackers will not go from BTC to fiat, but instead, will launder their cash through all possible cryptos, to hide their tracks.
I'm not sure why you claim that hackers need to buy BTC, this is nonsense? People are paying hackers with BTC, hence the increasing price.
Some of the hackers' addresses are known. Certainly not all. Otherwise why launder money using alt coins?
If you believe that the WannaCrypt theory is "hyperbole", then simply overlay the graphic (from the same site I linked) of the number of infected computers during the last month, with any cryptocurrency and enjoy.
Is WannaCrypt the only thing that changes the price of cryptocurrencies? Certainly not. Is it the most influential player in the last month? Oh, yes! Is this why Steem rose in value - most certainly!
Clarification - I believe I wrote victims would have to buy BTC, not the hackers. So we can agree on that :)
Re: addresses, I was referring to the addresses the hackers asked the btc to be sent to. I suppose these are only known if they were reported, so you are right we probably do not know them all.
We will have to agree to disagree though because at the end of the day, it is still a matter of opinion as we are both assuming we know what did the hackers with the funds.
We can logically assume (yes, this is not proof) that the ransom was in BTC, because it's the hardest to track and the easiest to launder, especially by coin mixing services and through unregulated exchanges, neither of which require user IDs.
What would the hackers do with the funds? Try to get them, at the end :)
Very true. But I wouldn't assume they'd be in any rush altogether :) Followed!
Good post. We have reached a new stage in the formation of the community. Now the rules have changed, and we must change. Steemit will develop and step forward.
I certainly hope most users realize what I've written and change their voting habits. Thanks for commenting! :)
Nicely argumented.
I do hope we'll find some other way for cryptocurrencies, especially steem, to accrue value than criminal activities.
It's about time such things started to spring forth.
The few coins supposed to be used for video-games could be an answer, except I don't think the big makers are going to use them. They much prefer having a monopoly over their in-game currency than allowing people to potentially exchange them outside of their game, without their "consent". that could of course be solved if every exchange, no matter where, carried a tax on that kind of coin that went to the game maker, but that would be overly complex if the coin needs to work for more than a single game creator.
I believe you're right that people should adjust their voting percentage depending on the value they want to give to the author.
Of course, this is rather difficult for 2 reasons I can see:
newer user's will need to be taught the basics of Steemit before they even understand there is a way to change their voting percentage.
Voting Percentage isn't easily changeable for minnows, given that apparently the option to see the percentage people have voted on a post and be able to choose one's own percentage is only possible once you get a certain stake in Steemit (at least to my understanding).
The easiest fix I can think of would be for everyone to see an intuitive way of changing their voting percentage on a post. There'd need to be a default percentage one could set in the settings, and an easily visible way to adjust it before one votes. (Like a little blue bar under the vote button, where one could drag it back and forth to adjust voting strength).
but, really, the cryptocurrency world in it's globaility needs to create more use cases for crypto. it it's just "investment", "anonymous transactions (often illegal)" or "money laundering", I can perfectly understand that any person using crypto's would find themselves under immense scrutiny by their local governments. 2 out of 3 of those use-cases are completely illegal in most places, after all !
Just my 2 cents (Should I be saying miniSTEEMS ? XD)
I agree completely. I believe that, in time, a couple of cryptocurrencies will begin to be widely accepted as payment methods by businesses (and it will unlikely be Bitcoin, as it is slow to confirm transactions - maybe LiteCoin). And a couple will gain momentum, because they will be perfect for laundering money (ZCash is through the roof, at the moment).
Btw, once Steemit allows you to adjust your upvoting power, you do get a little blue slider to choose the percentage (were you joking, or do you still not have this slider?). In fact, I've just noticed that the slider remembers the last used percentage for post upvotes and separately for comment upvotes. Today I've been sharing 30% on posts and 1% on comments quite easily, without any further adjustments.
Nope, still haven't seen the bar. do you know what the cutoff SP is to have it ?
I think you need to have 1 million vests of power. At the moment, you have around 300,000. Check out this link and see the information on the right.
And yes, I know that the alternative platforms like eSteem, Busy and chainBB allow one to change the voting percentage. but it's only an enforced choice on chainBB. eSteem only allows the change if you long-press the vote button... I discovered that by accident.
But this needs to be available on the default platform too.
There was some command line way to access the Steemit API - I think it was called Piston. But it's just as annoying, you have to copy paste urls to the command line to specify the voting percentage.
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